As the prolonged trade war between the US and China continues, American farmers are tangibly deferring equipment purchases, according to agriculture machinery manufacturer Deere & Co.

Trade frictions "have weighed on market sentiment and caused farmers to become more cautious about making major purchases, " Deere CEO Samuel Allen said Friday in his company's first-quarter earnings release, adding that its results were hurt by customer concerns over tariffs and trade policies.

It has been nearly a year since President Donald Trump announced plansto charge a 25% tariff on $50 billion worth of Chinese goods, kicking off a trade war between the world's two largest economies. So far, the US has imposed duties on $250 billion of Chinese imports, prompting China to retaliate.

Whether Trump can reach a trade deal with China will decide the performance of Deere shares and the whole industry in 2019.

"We see an eventual trade resolution as a tangible catalyst for the shares," said Morgan Stanley analyst Courtney Takavonis in a note out Tuesday. "Investors are unlikely to step in in the absence of further evidence of trade resolution or a notable improvement in farm sentiment."

Takavonis has an "overweight" rating and $192 price target — 18% above where Deere shares were trading on Tuesday.